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Mortgage rates creep back up to 5%

Lenders nationally are committing to 30-year fixed-rate home loans at that benchmark on average, Freddie Mac says.

October 23, 2009|E. Scott Reckard

After three weeks in the sub-5% range, interest rates on 30-year mortgages crept back to that benchmark in the week that ended Thursday, according to the latest survey of lenders by Freddie Mac.

Freddie's report said lenders nationally were committing to make 30-year fixed-rate home loans at an even 5% rate on average.

That average applied to traditional mortgages of as much as $417,000 eligible for purchase by Freddie and its sister firm, Fannie Mae, with a 20% down payment by borrowers with good credit. The borrowers on average paid 0.7% of the loan amount in "points" and other upfront fees.

The average 30-year fixed rate as calculated in the Freddie Mac survey bottomed out at 4.87% two weeks earlier with similar points and fees.

Freddie Mac economist Frank Nothaft said consumers continued to seek the stability of fixed-rate loans, which remain extraordinarily cheap by historical standards, even though so-called 5/1 adjustable-rate loans -- mortgages in which the rate is fixed for the first five years before becoming adjustable -- could be had with an initial rate of 4.4%.

Only 6% of mortgage applications in September and October have been for variable-rate loans.

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scott.reckard@latimes.com

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